Back to top

Image: Bigstock

STRT vs. GNTX: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Automotive - Original Equipment sector have probably already heard of Strattec Security (STRT - Free Report) and Gentex (GNTX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Strattec Security is sporting a Zacks Rank of #1 (Strong Buy), while Gentex has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that STRT has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

STRT currently has a forward P/E ratio of 8.88, while GNTX has a forward P/E of 25.14. We also note that STRT has a PEG ratio of 0.59. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GNTX currently has a PEG ratio of 12.15.

Another notable valuation metric for STRT is its P/B ratio of 0.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GNTX has a P/B of 4.38.

These are just a few of the metrics contributing to STRT's Value grade of A and GNTX's Value grade of D.

STRT is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that STRT is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Strattec Security Corporation (STRT) - free report >>

Gentex Corporation (GNTX) - free report >>

Published in